Issue 6 2021 - FBJNA


A Hapag-Lloyd container rolls through Hamburg, Germany. (Hapag-Lloyd photo.)

Railroads keep North America’s congested supply chain from going off the rails

By John Jeter

Carpeting, paint, wallpaper and garden supplies. Yoga mats, rowing machines, treadmills and bicycles. These are the kinds of goods consumers have been consuming during the do-it-yourself, stay-at- home economy during the past year—and clogging up the supply chain. “If you want to buy a bicycle

today or an e-bike, you have to wait six to eight weeks. Entertainment


People want bigger screens for Netflix, and the kids want to watch Disney, so now they want to have two big screens,” says Nils Haupt, spokesman, Hapag-Lloyd. Adding to his living-room

assessment from Hamburg, Germany, he says: “The entire logistics system is totally

overwhelmed.” The numbers bear him out. According to a June 14

Deloitte report, spending on services—that is, vacations, dining out, all the fun stuff we did before the pandemic—fell $339 billion from the end of

2019 to the first quarter of 2020. During that same period in 2021, spending on durable goods spending jumped $357 billion, the report says. Here’s another sobering

statistic: March 2020 saw a 14% year-over-year decline in U.S. inbound TEU traffic, according to the Council of Supply Chain

Management and

Kearney, management

Professionals the

global consultancy.

Then, as their 73-page report, “Change in Plans,” reported in June, traffic skyrocketed 22% last February, Those statistics help explain of

some the congestion headaches. Meantime, though,

Cranes frame a Ryder flatbed. (Ryder photo.)

C-suiters from several marquee rail, trucking and maritime companies say the global supply chain—before, during and after the pandemic—is just that: a chain. “We are always mindful that

intermodal is a multimodal business, where all parts depend on each other to keep the supply chain moving as efficiently as possible,” says Tom Williams, BNSF’s Group Vice President, Consumer Products. That didn’t stop Martin Oberman, chairman of the U.S. Surface Transportation Board, an independent federal agency, from taking the rail industry to task for


performance.” In a May 27 letter to the chief

executives of all seven U.S. Class 1 railroads, he went on to state the obvious: “We have

Volume Increases

Indeed, BNSF saw consumer- pr o duc t s v olu me s

15 >>

been made aware of instances of significant congestion at various intermodal facilities, which has resulted in delayed train arrivals and disruptions to container availability.” That didn’t sit well with Katie

Farmer, BNSF’s President and CEO, who pointed out in a June 9 response to Oberman that the railway’s weekly volumes plummeted as low as 150,000 units “during the depth of the pandemic,” but then: “The situation has

flipped quickly,” she wrote. “Since the beginning of the year, we have had 11 weeks where BNSF delivered more than 200,000 units.”

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